In the present disclosure, where a document, act or item of knowledge is referred to or discussed, this reference or discussion is not an admission that the document, act or item of knowledge or any combination thereof was at the priority date, publicly available, known to the public, part of common general knowledge or otherwise constitutes prior art under the applicable statutory provisions; or is known to be relevant to an attempt to solve any problem with which the present disclosure is concerned.
Economic downturns accompanied by foreclosures and bankruptcy filings sober up consumers and increase their desire to manage their financial assets in a more knowledgeable and competent manner. Most Americans save too little, spend too much, carry too high a debt burden and have no plan on how to turn their financial lives around. Unfortunately, these individuals and small business owners have little or no grasp of financial basics and feel that they cannot develop and follow a financial plan alone.
Generally, many people believe financial planning and management is a budgeting problem and many have provided budgeting tools for reaching short-term goals, focusing on cash flow. Others believe that financial planning is an investment strategy and provide tools for portfolio management with a focus on net worth. In my own copyrighted booklet, “Wealth is good, cash flow is better: simple rules and a single tool to measure and manage your financial success,” (® Keith Whelan, 2007) I have explained that neither approach is sufficient for financial success. The booklet explains how every asset is analyzed not just with respect to the associated liability, such as a mortgaged property, but also the impact of the asset and associated liability on cash flow.
Many have proposed systems for gathering and collating relevant financial data to calculate or manage financial position. Most of these are narrowly tailored to meet the needs of managers of large businesses who manage the internal assets of a company. Those that focus on the individual or small business financial health generally focus on gathering data or portfolio management.
Sloan et al. (U.S. Patent Application Publication 2002/0095363) teaches future cash flow analysis using automated and live coaching, the amount and depth of coaching based on a service level agreement. In this system, the user manually enters financial data and the system models only cash flow for the user. The only external data included in the cash flow calculation are generic data such as interest and inflation rates, allowing the user to model different outcomes and providing an associated risk assessment.
Haynie et al. (U.S. Patent Application Publication 2004/0205008) discloses a system and a method for computing cash flows of taxpayers from verified tax and financial data, taking data from scanned verified tax transcripts or from a database containing verified tax data. The system is intended to provide financial planning assistance, but for third party users, such as lending institutions, or allows the user to merely calculate cash flow.
Johnson (U.S. Patent Application Publication 2009/0204531) teaches financial management and referral software into which a user manually enters assets, liabilities and goals and associates goals with particular assets or liabilities to create a budget, a separate cash flow statement, a separate balance sheet and a separate income statement, without integrating the statements, budget or balance sheet together. The user updates the program with financial transactions and the software reconciles the transactions with the various financial statements and budget. A trigger event associates a professional service provider, providing a referral to the user to the professional provider based on a need identified by the triggering event.
Chaffee (U.S. Pat. No. 7,165,044) discloses an investment tracking system, using an internet query, to create a performance report by gathering security price data for all user's holdings, connecting to various databases and pulling customer account information into one report to yield a report on the net worth of assets, profits and loss, and return on investment. The system collates data from multiple accounts into one report. The system uses a single entry method to produce a double entry presentation. There is no cash flow analysis and the focus is narrowly limited to only publicly traded securities, without considering other assets.
Arnott et al. (U.S. Patent Application Publication 2007/0055598) teaches a method for creating a system of indices based on accounting based data, as well as various financial and non-financial metrics to use as a basis to purchase securities for a portfolio. While this provides guidance for an investor, it is limited to investing and does not provide an overview of net worth that includes other assets and liabilities, nor does it analyze the cash flow from the investments.
Heyns et al. (U.S. Patent Application Publication 2004/0073467) provides planning and budgeting modeling for business managers to increase cash flow and increase shareholder value, which in turn, increases market value of the stock. The model identifies key drivers of value to create operating strategies, increase critical capabilities, align process and communicate strategy and execution. However, it does not provide tools for the individual, nor consider capitalization, in the case of the corporation, or net worth, in the case of the individual.
Ebert (U.S. Pat. No. 7,571,129) describes a method of visualizing numerical business benchmarks to present general performance relative to the industry; the benchmarks include calculating all financial ratios such as quick ratio, current ratio, return on assets, and return on equity. The method is for an investor or others to evaluate a business prior to acquiring or investing. The method is limited to investment analysis and does not provide direct cash flow analysis of the business nor demonstrate the effect of the investment on net worth or on cash flow of the investor.
Eder (U.S. Patent Application Publication 2002/0046143) describes a system for valuing high technology companies by measuring performance of business elements, such as human resources and sales management, and predicting future cash flows based on each element. The method pulls data from internal and external databases to calculate the relationship between the market value of the business and the calculated business value for use in forecasting future equity prices. Eder has further refined the system in (U.S. Patent Application Publication 2005/0119922) to perform the valuation on a specific date. Induction algorithms are used to create composite variables that relate element performance to enterprise revenue, expenses and changes in capital. Predictive models are then used to determine the correlation between the value drivers and the enterprise revenue, expenses and changes in capital. These methods provide no insight to an individual, but only to executive level management of a publicly traded company and not to the small business.
Lowson (U.S. Patent Application Publication 2006/0112130) discloses a system that standardizes, automates, and facilitates the process of identifying, evaluating, selecting, and managing product and service resources for both individual and business resource users within specific industries. This system does not analyze cash flow or net worth and does not relate product and service resources to financial measurements.
Mehldahl (U.S. Patent Application Publication 2005/0055289) describes a multi-dimensional business information accounting application to generate conventional accounting statements or to slice the data to produce business specific information. This method provides no insight to an individual, but only to executive level management of a business. It merely prepares conventional statements or customized statements, with no financial analysis.
Adhikari (U.S. Pat. No. 7,778,936) provides valuations of a business entity, enabling a user to modify the input elements to determine how the modified elements affect the financial output of the valuation, and a module enabling the user to switch between modes.
Leong et al. (U.S. Pat. No. 7,610,233) developed a network system for bidding in a virtual financial trade environment that promotes categorizing bids and sending to sellers, who then made offers to the buyers. Transactions are then closed between the parties. The system provides no financial or analytical tools for measuring and managing financial status for an individual or small business.
While certain aspects of conventional technologies have been discussed to facilitate the present disclosure, no technical aspects are disclaimed and it is contemplated that the claims may encompass one or more of the conventional technical aspects discussed herein.